by Paul Martin

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by Paul Martin


Just like an electric cord connects a lamp and a socket, your proposal connects your business partner prospect and your sponsorship offer. And it can be just as powerful.

The Business Partner Proposal connects our conversation with the potential partner (the Partner Opportunity Interview) and, hopefully, an Agreement to sponsor.

The Proposal connects your prospect with your offer

Nonprofit Sponsorship: Different and Better

Every time that we go to the hear the orchestra, we see a wall honoring each major sponsor that joined together to fund the symphony center. My wife worked for one of the sponsors. When we see the business name (probably 3 times per year for the last 20 years), we remember the good people and good work of the company. We never hesitate to recommend them. We see their civic sponsorship and their name becomes top of mind again.

Simply, nonprofit sponsorship offers are quite different from advertising offers. They’re better.

When a sponsor joins your organization’s mission…

  • They receive recognition. Sponsorship recognizes the Business Partner as a booster of your nonprofit. In the reader or hearer’s mind, the sponsor isn’t merely an advertiser who pays for the position, the sponsor joined with your organization to make an impact.
  • You pay less tax. Under current Internal Revenue Service rules, when a Business Partner expects to receive a substantial return benefit, your nonprofit must pay tax on the Unrelated Business Income. If the Business Partner pays for a qualified sponsorship that aligns with your organization’s purpose, the IRS says your organization received a donation and can be exempt from tax.

Legally: Sponsorship Vs. Advertising

The Internal Revenue Service (IRS) in the United States distinguishes between advertising and nonprofit sponsorship in how these activities are taxed and reported, especially concerning the treatment of income received by nonprofit organizations. Here’s a brief overview of the differences:


When a business pays a nonprofit organization to display its logo, product, or service in a manner that promotes the business, this is considered advertising. This can include messages that contain qualitative or comparative language, price information, or calls to action. The rationale is that the nonprofit is engaging in a commercial activity that is not directly related to its exempt purpose.


On the other hand, sponsorship is when a business provides financial support to a nonprofit in exchange for the display of its name, logo, or product lines, without the expectation of a substantial return benefit. Sponsorship does not advocate for the sponsor’s products or services and typically does not include qualitative or comparative descriptions, price information, or calls to action.

The key difference lies in the nature and intent of the transaction. Advertising seeks a commercial benefit and is considered unrelated business activity, subject to taxation. Sponsorship is treated more like a charitable contribution, with fewer expectations of a direct commercial return, and is generally not taxed. The IRS guidelines detail specific criteria and exceptions, helping organizations determine how to classify and report their income properly.

Radio and TV, Too

In agreement with the IRS, the Federal Communications Commission outlined differences between Advertising and Underwriting (similar to Sponsorship). The Commission Policy on the Noncommercial Nature of Educational Broadcasting gives guidance for noncommercial radio stations.

Federal and State Tax Statutes

Many states tax Unrelated Business Income, so check with your organization’s accountant about how to adjust your policies in accepting sponsorship gifts from Business Partners.

Your Proposal For Business Partners

You may surmise that the purpose of the sponsorship recommendation is to help the Business Partner know what to expect without the expectation of a substantial return benefit.

Remember: Your written offer becomes the invitation for a Business Partner to join the mission of your nonprofit organization.

Your plan can be one page or it can be many pages. It can be paragraphs in a document or bullet points in a slide deck.  In truth, a brief offer can be more persuasive than a long offer.

Be emotional. Allow the Business Partner to see the beauty of the impact of your organization. You’re not just another advertising medium, you make an impact that can last for eternity.

Regardless of length, here’s a quick outline of what you might consider including in your Business Partner Proposal:

1. Purpose

The Purpose section recounts key points from your Partner Opportunity Interview that shows the purpose of the Business Partner. Certainly, the Business Partner wants to make a profit, but what impact do they want to make? Include it as a part of a mini-biography on the Business Partner. Let’s start with talking about the Business Partner, not us.

2. Objective

When you and the Business Partner want to achieve something together, put it here. Perhaps you want to impact more people through concerts or on-air encouragement through music. Show what you aim to do together. Display quotes from the people who benefit from the work of your organization to clarify the impact.

3. Power of Recognition

Much like the quick story on the local symphony that reminds us of a Business Partner who helped build the symphony hall, the Power of Recognition section relays what people think when they hear or see recognition the Business Partner with your organization. Ideally, print two or three quotes from people who say they respect and look forward to working with Business Partners who sponsor your organization or event.

4. Recognition

Here, show how you plan to recognize the Business Partner’s involvement with your organization. You may put exact frequency of announcements, size of logo display, sample program or content and any other way that gives the Business Partner an idea of the recognition. In fact, many radio stations produce ‘spec spots’ so the Business Partner can hear what their recognition will sound like on the air.

5. Reminder of Your Mission

Write the mission of your organization and connect-the-dots with how your mission and purpose of the Business Partner complement one another.

6. Sponsorship Payments

Here, note the amounts due for the sponsorship you outlined. Often, these require the first gift to be paid in advance for the recognition to begin.

7. About Your Organization

This final section tells all about your organization: the mission, brief testimonies from those impacted by it and anything else that you feel expresses the emotion and beauty of the work your organization does in the lives of people.

Although this quick outline looks long, you may make it brief and re-use sections for many Business Partners without significant adaptation. The ‘evergreen’ sections on Power of Recognition, Recognition, Reminder of Your Mission and About Your Organization can be repurposed for many Business Partners with occasional updating.

Presenting It

You worked hard to get appointments, getting to know the prospective Business Partner and preparing your recommendation. Be sure to put your best foot forward when you invite your prospect to join your mission:

  1. In-Person Appointment. Propose in-person if at all possible. I’ve flown across the country to present sponsorship opportunities. Why? The prospect will pay more attention and may voice some questions that you can answer in real time.
  2. Video Call. If you can’t be there in person, be there on video and make it come alive for the prospect.
  3. Not Email. Often, sending your offer via email in advance of an In-Person Appointment or Video Call is a fast way to get a ‘no’ or a stall. When you present in-person, you can make the offer come alive by emphasizing portions that excite the prospect. If you send it via email, the offer can be a word-salad that doesn’t really connect with the prospect as much as if you are there.
  4. Attractive, But Not Art. When I put together a recommendation, I spend more time on the evergreen portion when I first build a presentation, but speed becomes my objective with those that come after it. I’ll spend time on the Purpose, Objective and Recognition sections with light-editing of the other parts.
  5. Come Prepared With Agreement. One of the most predictably disappointing situations: you present your offer; the client agrees; you email the agreement; they never sign it; they ghost you. They had every intention of signing it when you were with them, but now they vanish. Be prepared by bringing an agreement when you’re ready to present.

Be Connective

The Business Partner Proposal connects our conversation with the potential partner and, hopefully, an Agreement to sponsor. It is the invitation for a business partner to join your mission. It will be a big deal for both of you, so treat it as important as you feel it can be.

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